The European Commission said Wednesday higher tariffs will be imposed on Chinese EV makers for excessive government subsidies that threaten the EU economy. Commissioner for Trade Valdis Dombrovskis said facts and evidence in an investigation led to the higher tariffs. File photo by Caisa Rasmussen/EPA-EFE
The European Union Wednesday announced plans for higher tariffs on Chinese EVs, citing heavy Chinese government subsidies that threaten the EU economy.
The tariffs, set to take effect by July 4, would include 38.1% tariffs on producers of battery electric vehicles who have not participated in the commission’s probe of the industry and a 21% duty on those who participated but have not been sampled” on top of current import duties of 10%. Advertisement
“The commission has provisionally concluded that the battery electric vehicles (BEV) value chain in China benefits from unfair subsidization, which is causing a threat of economic injury to EU BEV producers,” the commission said.
The tariff action follows an investigation that began Oct. 4, 2023, and found the subsidies are leading to an influx of Chinese EVs into the EU market at artificially low prices, according to the commission.
The European Commission said the investigation analyzed a large volume of evidence relating to each of the Chinese EV companies and was able to calculate the level of subsidies.
The commission said the tariffs will be applied corresponding to those subsidy levels.
The EU tariffs on three Chinese EV producers that were sampled would be 38.1% for SAIC, 20% for Geely and 17.4% for BYD. Advertisement
Tesla’s Chinese operations may get an individually calculated tariff rate, following a “substantiated request”, according to the Commission.
The Commission added they are reaching out to Chinese authorities to explore ways to resolve the issues “in a WTO-compatible manner.”
China’s Ministry of Commerce said in a statement, that the EU decision lacks “factual and legal basis” and that the bloc has artificially constructed and exaggerated the subsidies and called the tariffs “a naked protectionist act” that escalates trading frictions.
“The EU has disregarded facts and WTO rules, ignored China’s repeated strong opposition, and ignored the appeals and dissuades of many EU member governments and industries, and has acted unilaterally. China is highly concerned and strongly dissatisfied with this, and the Chinese industry is deeply disappointed and firmly opposed to this.”
EU trade commissioner Valdis Dombrovskis told CNBC the EU investigation was based on “facts and evidence” and that the EU and Chinese authorities are currently engaged in efforts to reach potential solutions.
